StarKist ordered to pay USD 100 million fine for role in tuna price-fixing

Published on
September 12, 2019

StarKist & Company has been ordered to pay a criminal fine of USD 100 million (EUR 90.3 million) for its role in a tuna price-fixing conspiracy, the statutory maximum fine. 

The decision, which was announced by the Department of Justice (DOJ) on 11 September, comes after the court and the company wrangled over the monetary amount of the fine. StarKist’s attorneys had been pushing to have the fine lowered to USD 50 million (EUR 45.1 million), calling the decision “life or death” for the company, while prosecutors had been pushing for a full fine based on the company’s recent investment in TechPack Solutions, an India-based can and bottle technology firm. 

The court – and StarKist’s own expert witness – asserted during a July hearing that TechPack was worth far more than the USD 100 million fine. At a later August hearing the court indicated that StarKist had not yet provided sufficient evidence that the sale of TechPack would not be enough to offset the criminal penalties. 

At the time, according to case documents, the court “indicated that, based on the record before the Court, it is inclined to impose a fine of USD 100 million but acknowledge there are a number of variables which could impair StarKist’s ability to pay the plaintiffs pursuant to settlement or judgement in the ongoing civil action before the Southern District of California.”

StarKist had argued that potential civil penalties in multiple civil cases could end up bankrupting the company if it had to pay the full USD 100 million fine. The company has already paid out USD 55 million (EUR 49.6 million) to various U.S. grocery chains, including Walmart, Kroger, and CVS, and it still remains the target of a class-action lawsuit. 

The prosecutors argued that StarKist’s attempt to have the fine lowered would send the wrong message to other companies. 

“A USD 50 million fine would not afford adequate deterrence to criminal conduct,” they argued. “Instead, it would demonstrate to other corporate defendants that they can escape just punishment for their crime by spending money on anything and everything ... other than the penalty for that crime.”

In the end U.S. District Judge Edward M. Chen found that the company had not provided sufficient justification for lowering the fine, and decided to impose the statutory maximum of USD 100 million.

“Today’s result demonstrates our commitment to enforcing the antitrust laws aggressively against companies that fix prices,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said in a DOJ release.  “Hard-working Americans deserve the benefits of open competition when they spend their hard-earned money on items that stock kitchen shelves.  When a corporation cheats customers at the checkout line, the Antitrust Division will hold it accountable to the greatest extent.”

The fine is the latest and largest given out by the DOJ for the multi-company price-fixing case that had the United State’s largest tuna companies embroiled in federal and civil cases. Bumble Bee Foods, a co-conspirator in the price-fixing, was fined USD 25 million (EUR 22.5 million) after pleading guilty in 2017. The case came about when Chicken of the Sea, a subsidiary of Thai Union Group, blew the whistle on the price-fixing, which took place between 2011 and 2013. 

Due to its status as a whistleblower, Chicken of the Sea avoided federal fines, but has still been paying a number of settlements to multiple companies, of undisclosed amounts. 

In addition to the lawsuits and cases against the companies, officials at the companies have been facing their own cases. Former Bumble Bee CEO Chris Lischewski has been in an ongoing court battle over his roll in the price-fixing case, while other members of the company already pleaded guilty.

All told so far, tuna companies have shelled out a total of USD 180 million (EUR 162.5 million) in fines or civil penalties, and unknown amounts in a variety of settlements. 

Photo courtesy of StarKist

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